An Italian clampdown on tax evasion has revealed that over £10 billion was
sent abroad to escape tax last year, the Italian police have said.

In a financial report released on Monday, the police said that nearly €50 billion (£42 billion) of income was undeclared in Italy in 2010, almost twice as much as the year before.

Of the unreported money, over €10 billion (£9 billion) was sent abroad to avoid tax.

Liechtenstein and Switzerland were the main recipients of the money, receiving 26 and 25 per cent respectively, while seven per cent was sent to Britain and another six per cent to Panama.

Like many European countries, Italy has put increased effort into fighting tax evasion and avoidance since the beginning of the economic crisis.

Authorities have particularly targeted Switzerland, one of few countries with which Italy does not have a tax treaty, and whose shared border with Italy makes it an obvious choice for wealthy Italians looking to stash their assets abroad.

Last month, the foreign ministers of both countries met to discuss a taxation treaty based on Switzerland's agreement with France, but negotiations have yet to prove successful.

The relationship between the two countries is believed to have been soured by Italy's insistence that Switzerland remains on its "black list" of tax havens, as well as its repeated raids of Swiss banks and searches of Italians entering the tax haven in the past few years.